Thursday, April 21, 2011

#Stocks to watch:* Tenaga, Integrax, TRC Synergy, CI Holdings, DRB-Hicom

KUALA LUMPUR: Key regional markets including Bursa Malaysia are expected to extend their gains on Thursday, April 21 as investors are drawn to riskier assets, inspired by the strong overnight close on Wall Street where the Dow industrials surged to their highest in almost three years

Reuters reported that big earnings surprises gave a positive turn to investor sentiment on Wednesday, propelling U.S. stocks to their best day in a month also.

The Dow Jones industrial average gained 186.79 points, or 1.52 percent, to 12,453.54. The Standard & Poor's 500 rose 17.74 points, or 1.35 percent, to 1,330.36. The Nasdaq Composite added 57.54 points, or 2.10 percent, to 2,802.51.

Stocks which could see trading interest on Thursday, April 21 include INTEGRAX BHD [], TRC SYNERGY BHD [], CI Holdings Bhd and DRB-HICOM BHD [].

TENAGA NASIONAL BHD [] could also see trading activity ahead of the release of its financial results for the second quarter ended Feb 28, 2011 after market close. In the first quarter, it posted net profit of RM712.90 million.

AmResearch reiterated its Hold call on TNB but with a lower discounted-cashflow derived fair value of RM6.90 a share on lower earnings expectations for FY11 ending Aug 30, 2011.

AmResearch had downgraded FY11F earnings by 17% to RM2.4 billion as it raised its coal assumption by US$10 a tonne to US$110 a tonne in the absence of any off-setting tariff rate increase.

TNB's associate Integrax has declared a special interim dividend of 16% less income tax at 25% for the financial year ending Dec 31, 2011. The dividend will go ex on May 6 and the payment date is May 10.

In a related development, Integrax announced that Harun Halim Rasip, the executive director and CEO''has tendered his resignation as a director and as CEO. His resignation has been accepted by the board and took effect on Wednesday.

In the interim, pending the appointment of a new Chief Executive Officer, the day to day management and operation of the Company will be overseen by the Group Financial Controller who will take direction and report to the Board.

TRC Synergy's CONSTRUCTION [] unit Trans Resources Corporation Sdn Bhd has secured a contract to undertake the construction of two types of public housing at Precinct 8 (Phase 1), Putrajaya worth RM43.8 million.

TRC said the contract was scheduled to be completed within 20 months. The project involved the construction of 40 units of three-storey semi-detached and four two-and a half-storey semi detached public housing in Putrajaya.

Including this contract, TRC has an order book close to RM1.3 billion, which will keep the company busy for the next three years.

TRC had also submitted numerous tenders for the SCORE projects worth more than RM1 billion.

CI Holdings posted net profit of RM8.20 million in the third quarter ended March 31,2011 from RM10.95 million a year ago mainly attributable to increase in raw materials especially from the beverages division.

Effective from Jan 1 this year, the beverages division, along with 12 other big beverage peers, is no longer eligible to purchase government subsidised sugar.

CI Holdings said this change in policy increased the cost of sugar by 38% overnight.

It said revenue rose 2% to RM140.09 million from RM137.70 million while earnings per share were 5.78 sen compared with 7.71 sen.

DRB-Hicom Bhd clarified it has not received any notification from Khazanah Nasional Bhd that it had won the 32.21% POS MALAYSIA BHD [] stake.

Meanwhile, Pos Malaysia said it had made the necessary due enquiry with Khazanah which replied that it 'will make an announcement on the winning bidder in due course once its internal processes and governance procedures relating to or in connection with the said bid process are completed."

Nestle (Malaysia) Bhd's net profit for the first quarter ended March 31, 2011 rose 10% to RM152.69 million from RM138.79 million a year earlier on the back of a double digit growth in revenue driven by both domestic and export sales.

Revenue for the quarter rose to RM1.18 billion from RM1.02 billion. Earnings per share were 65.11 sen while net asset per share was RM3.28.

Nestle said on Wednesday, April 20 the operating profit stood at RM196 million, an improvement of 11.5% over the same period last year.

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